CalPERS program has struggled for many years, falling victim to loose underwriting standards, a high number of claims and poor investment returns. Many private insurers have fell victim to similar trends, but had a larger pool of policyholders to share the risk. CalPERS has struggled more acutely in part because because it restricted its policies to members. About 150,000 of them hold policies.

The fund stopped taking new long-term care insurance applicants in 2009 to stem losses that threatened the program's viability. But officials today said that premium increases, an expected migration to the new, cheaper policy and other factors are strong enough medicine for the ailing program that it can again take applications at the end of this year.

The strategy includes tougher underwriting standards and opening the program to adult children of CalPERS members, assuming that the Legislature changes state law to allow it. Applicants could enroll any time, not just during a specified time of the year.

"We will be getting healthy lives in in these age groups as well as even perhaps younger lives if we open it up to adult children," CalPERS staff member Kathy Donneson told the fund's board this morning. "So we can grow the (risk) pool."

Harvey Robinson, president of the Retired Public Employees' Association of California, asked whether members holding the top-tier policies would get some sort of credit for shifting into cheaper plans.

"You know, this is voluntary insurance program and policy, so they did realize the benefit of the program while they were paying premiums," Espinoza said at this morning's meeting. "Therefore, there wouldn't be a credit because they did have the benefit available to them should they have become eligible for a claim."

Figuring out the new policy costs is complex because so many factors can drive prices up or down. So we offer these documents and links, but questions should go to CalPERS' long-term care customer service line at (800) 982-1775.

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Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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